China's growing importance to Hollywood: Cruise, Whedon, more weigh in

The next time the Avengers assemble on the big screen, don’t be surprised if you see them touch down at some point in China. Given the rapid, almost Hulk-like growth of the film market in that country over the past few years, Avengers director Joss Whedon is half-expecting to get a call any day now asking whether he can set part of the superhero sequel in a Chinese locale. “I’m working on the script right now, and if someone came to me and said, ‘We’re looking into doing a chunk of this in China’—well, I’d have to think about it,” Whedon says. “China is on my radar. It can’t not be at this point.”

As North American movie theater owners gather in Las Vegas this week for their annual convention, CinemaCon, the state of the domestic movie business isn’t looking so rosy, with this year’s box office revenue running 12 per cent behind 2012 and 3-D ticket sales continuing to slide. But pan across the globe to China, and the picture couldn’t be more different. If America’s long love affair with movies seems to have cooled somewhat lately, China is in the first blush of a passionate new romance. How passionate? Put it this way: When James Cameron’s sci-fi epic Avatar opened in December 2009, there were only 13 IMAX screens in all of China. Today, there are 110, with some 140 more scheduled to open in the near future. “When I go to China, people will ask me for my autograph,” IMAX CEO Richard Gelfond says, adding drily, “That typically doesn’t happen in other places.”

With box office revenues rising 30% last year to $2.7 billion, China has now edged out Japan to become the second-largest film market in the world following the U.S. New movie screens are sprouting up across the country at a rate of roughly 10 per day, and some project that China could surpass the U.S. as the world’s top film territory within five years. It’s no surprise that Hollywood is eager to capitalize on that torrid growth as much as it possibly can. “China is on most producers’ minds all the time now,” says Barry Levine, producer of the sci-fi film Oblivion, which opens Friday. “It is a giant market if you can reach it. But you have to play it smartly.”

Indeed, figuring out the smartest ways to reach Chinese moviegoers has become one of the film industry’s top priorities. For years, the biggest barrier for entering China’s film market was the quota on foreign-made films imposed by the Chinese leadership to protect its homegrown movie business. But that quota, which historically capped foreign releases at 20 per year, has now eased to allow an additional 14 films per year to open in China, provided they’re in 3-D or IMAX, formats of which Chinese audiences are particularly enamored. Further sweetening the pot, China has raised foreign filmmakers’ share of Chinese box office receipts from 13% to 25%.

Still, for Hollywood studios, navigating the complex financial, political, and cultural landscape of China poses significant challenges. All films must be submitted to China’s State Administration of Radio, Film, and Television (SARFT), which enforces a strict code aimed at weeding out such taboos as sex, violence, religion, criticism of the Chinese government, and even such supernatural phenomena as time travel or ghosts. To get through this system of censorship, studios have shown an increasing willingness to tailor their films specifically for Chinese audiences. In the upcoming film World War Z, references to a global zombie pandemic originating in China were expunged for the Chinese market. In the case of the recent remake of Red Dawn, the army invading Middle America was changed from China to North Korea. Last year’s Cloud Atlas was cut by 40 minutes for its China release to remove offending scenes of sex and violence. Just this month, Quentin Tarantino’s Django Unchained was edited to soften some of its graphic violence and gore—yet still wound up being pulled from its release in China by SARFT for “technical reasons” that remain unclear.

Where some see these concessions to state-sponsored censorship as incompatible with the values of unfettered speech and creative freedom Hollywood espouses, others see them as simply sensible business and good diplomacy. “You have to be sensitive to Chinese tastes,” says IMAX’s Gelfond. “China is the second-largest economy in the world, and the Chinese audiences really want to feel special. They want to feel like a movie was made for them, not made for someone else and exported to them. Increasingly if we want to succeed in China, we have to tailor [films] to their consumers’ tastes.”

Those tastes don’t always line up perfectly with American moviegoers’ preferences. Visually spectacular, effects-heavy action films based on globally recognized properties, such as superhero films or the Transformers franchise, tend to perform strongly in China, whereas films like Jack the Giant Slayer, Oz the Great and Powerful, and G.I. Joe: Retaliation, which may be less culturally resonant with Chinese audiences, have fared less well. Sometimes, though, there are surprises that can be learned from, as in the case of The Expendables, which proved a sizable hit in China. “They marketed The Expendables as a family film there,” says Oblivion executive producer Jesse Berger. “You think, ‘A family film? That doesn’t make sense.’ But they did 15 different trailers that were targeted to different people: young and old, men and women. There was a kids’ version and a version for people who were Dolph Lundgren and Stallone fans.”

Though conventional wisdom holds that comedy is the genre that fares most poorly abroad, Paul Feig, director of Bridesmaids and the upcoming female buddy-cop comedy The Heat, is hoping that, even there, the Chinese market may be starting to open up. “I would love to crack the Chinese market,” Feig says. “I am a big believer that comedy can bridge those [cultural] gaps. I’d like to be the United Nations of laughs.”

Perhaps no major studio film has gone further to cater to Chinese tastes than Iron Man 3, which opens next month. The film was shot partly in Beijing and is being given a massive publicity push there in advance of its opening. “People who know me back in America know that I’m very interested in all things Chinese,” star Robert Downey Jr. told reporters at a recent Beijing press conference. “I live a fairly Chinese life in America.” Most significantly, a substantially different version of the film will be released in China, with special bonus footage, including scenes involving top Chinese actress Fan Bingbing, being added to this customized version. In a statement, Marvel Studios called the moves “a springboard for future collaboration with China’s talented stars and its growing film and television industry.”

In the case of another upcoming superhero film, however—Man of Steel—no such dramatic steps have been taken to accommodate the Chinese audience. Warner Bros. Pictures Group president Jeff Robinov says he has no concern that Superman, though arguably the most American of superheroes, will have any trouble being accepted in China or anywhere else. “I think that ground has already been broken,” he says. “I think Man of Steel will transcend [borders]. If you even look at Captain America, that movie was successful internationally—and that is Captain America. Superman is at least meant to be a global sort of hero.”

Some have concerns that Hollywood could easily become overly dependent on China, both for consuming American-made films and helping to pay for them. (Paramount, for example, recently announced that Transformers 4 will be co-produced by two Chinese companies.) The fact is, the biggest hit at the Chinese box office so far this year by a large margin has not been a Hollywood film but the homegrown romantic comedy Finding Mr. Right. Having spent 15 years traveling to China to build up IMAX’s business there, Gelfond says it would be a mistake to view the country as some kind of simple slot machine that will pump out millions of box office dollars indefinitely each time you pull the lever. “People think that making money in China is easy, like snapping their fingers, and it isn’t,” Gelfond says. “I think a lot of the low hanging fruit has been picked. It’s a lot harder and takes a lot longer than people think.”

No matter how Hollywood’s relationship with China evolves going forward, Tom Cruise, who has long kept an eye on building and maintaining a worldwide fan base, sees the film industry’s increasingly global focus as an entirely positive development. “I always wanted to travel the world with my films,” the Oblivion star says. “I remember when I did Top Gun, it took me five months to travel the world. At that time there was a sense that the U.S. audience was what mattered. People thought in terms of domestic only. But I always felt like film was a great unifier. I wanted to make movies for everyone. I think it’s great that studios and producers and directors are thinking about the global audience from the start of a movie now.”

Even so, Whedon says jokingly, there are certain limits to how far he is willing to go to appeal to Chinese moviegoers when it comes to The Avengers 2. “If a studio person said to me, ‘Hey, that scene that takes place in Miami and features flamingos has to be filmed in China,’ I would be like, ‘Well, no, that doesn’t make any sense.’ ” He pauses and adds deadpan, “And no, there is no scene about flamingos in Avengers 2. I can’t stress that enough. I don’t want the fanboys to be abuzz tomorrow about flamingoes.”